When advising on the suitability of corporate structures, we are commonly asked whether a holding company can be liable for the debts of a subsidiary. The answer (of course) depends on a number of factors. [Read more…]

The definition of “director” in section 9 of the Corporations Act 2001 (Cth) (Act), goes beyond directors validly appointed, and includes de facto directors and shadow directors. This article explores the level of involvement in the affairs of a company that a person must have to be deemed a de facto director or a shadow director. [Read more…]

While convertible notes (Convertible Notes) may in a lot of cases provide considerable benefits for the issuer they may also create a significant burdens. This article attempts to explain what can be a complex financial instrument by examining some of the key features of Convertible Notes and some of the more common legal issues associated with their use. [Read more…]

What is a financial assistance?

The general rule contained in section 260A of the Corporations Act 2001 (Cth) (Act) is that a company may financially assist a person to acquire shares (or units) in the entity if the giving of assistance does not materially prejudice:

the interests of the company or its shareholders;

or the company’s ability to pay its creditors.

If a transaction is determined to be financial assistance, then shareholder approval and the requirements of section 260B must be complied with.

The term ‘corporate governance’ is often bandied about, but rarely explained in the context of a framework which can be applied to a variety of enterprise types.

So what is it? Corporate governance is traditionally thought of as the way in which enterprises are directed and controlled. More recently, corporate governance has been defined as the framework of rules and procedures by which the decisions in an enterprise are made, and how the controllers and held accountable for them. The term, ‘enterprise’ refers to all types of associations, companies, trusts and other hybrid entities that provide a product or service (Enterprise).